Dongfeng Peugeot Citroen Automobile Co., PSA Peugeot Citroen’s joint venture with Dongfeng Motor Group, has opened the first dealership to distribute cars for both Peugeot and Citroen brands.
The move will enable its new dealerships to make profits with lower upfront investment and better control of operating costs, Dongfeng said.
It is also part of the joint venture’s effort to fix its troubled operations, the state-owned Chinese automaker noted.
The first store for the two French brands started operation on Sept. 30 in Jiaozuo, a city in north China’s Henan province.
To avoid creating confusion for the different market positioning of the two brands, the store has set up separate showrooms for Peugeot and Citroen.
Dongfeng Peugeot Citroen plans to open 60 to 80 such dealerships in Chinese cities for the rest of this year, according to Dongfeng.
Previously, the joint venture distributed cars for Peugeot and Citroen through two separate distribution networks.
Dongfeng Peugeot Citroen, established in 1992 in the central China city of Wuhan, has been struggling with losses since the second half of 2018 due to prolonged sales contraction.
The joint venture can produce up to 840,000 vehicles annually for the Peugeot and Citroen brands at full capacity. But its annual deliveries have been stuck in a downward spiral after hitting a high of 704,000 vehicle sales in 2015.
In 2018, annual sales plunged 33 percent from a year earlier to around 253,000 vehicles and Dongfeng Peugeot Citroen posted its first annual loss -- 3.7 billion yuan ($522 million).
For the first three quarters of this year, its deliveries nosedived 56 percent year on year to 91,049, according to Dongfeng, a Hong Kong-listed company.
In China, PSA also runs a joint venture with another state-owned automaker, Changan Automobile Co.
Changan PSA builds and markets the Citroen DS product line. With annual production capacity of 200,000 vehicles, the partnership also has been struggling in the red as its sales remain limited since incorporation in 2011.
Last year, Changan PSA sold fewer than 3,900 vehicles, according to China Passenger Car Alliance, a Shanghai-based consultancy.
Information on Changan PSA’s sales so far this year is not available.